First, things first….mr. garg was very candid in this interaction and would therefore, rather than giving an account of the entire transcript, I am giving a point by point rebuttal of most common questions that myself and other investors had raised.
1. Why was the performance of the company so bad till now?
a. Mr. garg has had various business interests ranging from retail to jewellery in the US. Till 2009 is was not actively involved in cupid and was dependent on an external candidate to run the company and obviously, inspite of mr. garg spending around 15cr of his own “personal” money there was no output. Finally, in 2009 my garg decided to take the matters in his own hands and that’s when the recover plan was put into place and practice.
2. Why is his personal stake pledged at 75%?
a. In 2009 when he started getting involved in the company, the fiscal health of the company was really bad, and company needed some debt, which noone was ready to provide. At that time ING asked for personal guarantee for debt, and Mr garg being an NRI, had no option but to pledge his personal stake. Cupid, is now cash surplus and therefore, in next 2-3 quarters the pledge could be released.
3. Why did promoters sell their stake?
a. The person in question needed some cash urgently and selling shares provided the quickest liquidity. Mr garg, re-iterated that there were no malafide intentions behind it as the stocks were sold in their mid 30s and if there was anything malafide, they would have sold it at the best rate. Also, Mr garg admitted that it may have been a bad decision considering he was not aware that stock market sentiments can be hurt by such actions (he says he’s never traded any share ever and for all this he’s dependent on external advisors). He told me that promoter stake would be held up at this level without any selling. He also admitted that he was unaware of inner stock markets working and was deeply hurt by the conclusions being made by investors on promoter’s intentions on mere hasty but innocent decision of few thousand share sale. I explained him in detail, rationally, why this selling was being questions by investors.
4. What is Safeware & Co.?
a. Safeware is a stealth mode startup company (and therefore, no trace of company on web) registered in Naples florida. This company is started by four well known business guys (one of them is pure investor though) having very strong distribution channels. Safeware, zeroed in on Cupid after surveying a lot of companies in Malaysia, China and Thiland, but was introduced to Cupid, by a cupid’s existing customer (and Safeware’s friend). The company is for real and Mr. garg assured that he’s ready to face any legal action if otherwise. Also, he has requested US based investors to personally check the registration in case of any doubt. The export order is going to have a great annuity for cupid and could significantly add to the order book. Though, the effect would be visible from next FY and not much from this FY. By the way the agreement is already in place and Safeware, is expected to pay a visit in Jan 15 to Nashik plant again. I have got the details verified, but would expect, the shareholders to do it as well so that they can sleep tight .
5. What’s in store for Shareholders?
a. The company expects to perform very well in coming year, and for this year, company should exceed its first 6 months performance. Also, now that company is cash sulplrus Mr garg, is of the view that the shareholders would be rewarded (and we all know what it indicates). He also explained me his line of thinking that if there’s no capex and debt, excess cash should go back in the hand of shareholders. Enthused by its own performance, cupid is now actively researching on another product line – Lubricants (which again is very lucrative).
There was a lot of discussion but it would become a 10 page essay. From the meeting it was clear the Mr. Garg, needs some better guidance on how stock market operates and especially what hurts the market sentiments. I also asked him to get better CAs and now CS as well. Earlier, the company was in oblivion and noone was interested and therefore, their ignorance of the markets was not questioned, but not now. I explained him in detail how promoter selling hampered the sentiments. I told him first safeware news came, then promoters sold, coupled with no “web” trace of Safeware, and the history of company few years back, raised eye brows and there were accusations of some possible fraud. This visibly “hurt” mr garg has he took pains in explaining that the Cupid is genuine, Safeware is also genuine (he told me names of safeware founders and have verified it on linkedin) and admitted that it was clear that promoters treating their own shareholding as their personal measure of liquidity was a big blunder (although he said he had asked his advisors before selling) as was evident from numerous mails and calls they have received over this matter and assured it should not be repeated again (though IMHO selling a few thousand shares is never a problem). He also accepted my advice of getting better advisors for himself, especially who knew the street well and what affected the street as well. Mr, garg is a well to do businessman and given the fiscal health of the company he was not taking any salary so far, but given the cash condition, from this/next quarter he might start accepting the salary. Cupid, is extremely excited about future right now. The company has a very healthy order inflow and are now in a position to say no to low margin orders, something that was unthinkable a few years back. Also, the company has started paying full income tax and would think of rewarding the shareholders soon.
I came out of the interview with a very positive frame of mind especially w.r.t safeware and company’s genuineness.
Kudos and hats off to your effort Ace…
Great efforts Sirji. Way to go…:-)
Hi Ace,
What is your views on Allied digital
already replied multiple times. could you please search the blog
Great work ACE. I wish you could do a similar interaction with Wanbury’s management.
THANQ very much for caring for all your followers . It speak volumes , that you Don’t only Track the company you like but also make Sure the things which you shared on the Blog is Absolutely Well Researched . Hats of Sir,
With Regards Vakharia Mahesh.
True !!
I have rarely seen such commitments toward helping small investors .
Thanks ACEji .
Regards
prashant
grt ace!! and lo behold,cupid on uc!
more than price action, i know we are in great business and now i can rest peacefully 🙂
Thank you! Ace freshtrop is running up as if there is no stop only..
Europe being in doldrums according to news, though cannot say how it might affect their business on ground ,but this is a clear sign of over optimism. Running up 150 percent. Some people are saying it deserves a pe of 40!!!!! Let’s see what they have to say when things cool down
see, here’s my take…some people are seeing them as only exporters…but the goods that they export are fruits which has an FMCG based demand, so no matter people or happy or sad they wont stop eating fruits, only sentimets would get affected….well as far as PE is concerned, just enjoy the speculation…
Hello Ace, can you tell us the buzz around SKm egg product exports today? it reveresed all of a sudden and is in its lower circuits.
i already said yesterday i am not comfortable with trading pattern of SKM…please go through my comments yesterday….
Ace I’ve done complete research on wanbury and have been holding since your recommendation. Even though I have conviction, just want to ask whether they’ll surely report positive bottomline this quarter and it will not be an “abnormal quarter” for any reason again. If latter is the case I’ll probably take advantage by keeping money aside and average down.
What do you think ace? I’m expecting market to correct also overall so keeping money aside only to buy wanbury
there’s no surety man, there’s only expectation…how can i know the results before anyone else.?
Hi Zoom, which stock Dolly Khanna exited you said.
ace sir you have done a great job by meeting Mr Garg and clarifying all the doubts which ware created by the crowd. now i think we are in a great business which would create great value in the future. and if they start distributing dividend that would be an icing on the cake and than the stock would get a much better valuations and would be highly rerated
thanq for your efforts now i am more confident in this share and I am at peace with my investment made
is it because of the interview or the price action that you are feeling better 🙂
interview mainly, I am a long term investor and also i don’t like event base trading in share. according to me the only way to earn in equity is to have patience and go long term.
Dear Ace,
I am also confident of your latest recommendation Cybertech Sol. I will hold it for long term.
Thanks ACE for your hardwork for us.
Regards
thanks Mr.Ace for explanation on cupid and detail discussion with management of company. I think now investors confidence will boost and people will stop panic selling. i am sure in coming year cupid will cross 3 digit.
Hi ace valuable information.
Thanks Ace for all your efforts!
Hi Ace!
If I’m not mistaken Mr. Garg is based out of USA.Does this means you are also based in the US ?
no, he was in india till yesterday
Good work ACE, keep it up 🙂
Thnx Ace!
HiAce..What as per your view which one doesn’t work among these stocks…..
Manjushree, Astra, Sintex, Mold tek, Edelweis, Bhawati Autocast and Dynemicproducts?
Thanks
edelw bhagwai not interested
When the next investment idea will be ? this week ? ACE
not sure…
Ace, please post the results (when they are out) of companies which you have recommended !
its there on exchanges, why to duplicate efforts?
Waterbase turn to positive way. Waiting for wanbury.Sirvyour view on adi fine chemicals?
adi is nice
Zoom, what is the point you to know how much ACE earning.. Do not you earn as because of his recommendation in short term… if you ask me if even he earn crore aswell does not matter… be matured asking question … do not be childish…
wow…zoom…if its less will you pass on some to him…stop being voyeuristic…look at your own…even if he made…what bothers you…get a life…
hahahaha… ace, i guess people not too happy with your stock recommendations ! they want your money too !
dada yeh toh kalyug aa gaya hain, kalyug..
Hahahaha!
Ace people are not simply happy with your recommendations ! They want your money too !!
Dada kalyug aa gaya hain, kalyug
jokes apart but Ace you have the skin of a rhinoceros.. high tolerance level.. everyone ought to have that
since technology is your passion hope you admire tim cook .. he is my champ
tim cook, maybe but not as much as John McCarthy, alan turing and dennis ritchie 🙂 but you know everyone has done a great bit in his own right… some of them we all know … most we have never heard of…. but all are special in their own way…. God Bless
true ace.. founders of what computing is today.. obviously their achievements are vastly different.. its crazy if you actually connect with these guys.. so you really appreciate what they have contributed.. respect
so what do you think about usual debate of windows vs mac, android vs ios ?!
windows vs mac doesnt bother me as i am a unix guy… android because of emotional reasons 🙂
Hi Ace, As I am new to this blog I scared after taking couple of shares available in this blog. Now I got confidence after recovering most of my stocks including orient bev, wanbury, cupid, frestrop, cybertech, prima plastic. What is the frequency of posting new picks. Monthly, quarterly, weekly. Thanks again.
whenever i feel confident about an idea.
Hi Ace. Great piece of work. No one can match you in researching and stock picking. Your follow up reasearch to clear the ambiguity in the minds of small investors like me is fabulous
Now more competition E-Commerce business…Which sector will benefit also which scripts?
Ace, u tracking Sanco Trans? CMP 323 but mcap just 58.2cr. Nice result today
Ace, u tracking Sanco Trans? CMP 323 but mcap just 58.2cr ***ignore Nice result today***
yes
Thanks ace….u are god like ..helping so many person
no no no…dont equate any human being with god pls… i am one of you and you are one of me… God Bless…
Hello ace , would like to know your view on Hindustan Media Ventures for a long term investment .
ace was trying to understand why wimplast commands such good valuation.. products are more or less the same/nothing extraordinary perception wise also for their furniture.. growth is there but were seeing it in prima too
feel very confident about prima ace.. has a very long way to go.. ACP is their joker
ace but one thing i felt is prima really needs to overhaul their website.. though it is a boring business, still feel that it left a very bad impression first time i had a look
i agree
Dear ace, thank u for all ur recommendations. i entered v2@30, prima@52,cybertech@69, planning to enter cupid and waterbase. Iam convinced with both. But when I compare waterbase with avanti, waterbase does not feel to be undervalued@60 price. I could not understand in what way waterbase is undervalued or better than avanti. Its appearing to me that avanti is superior to waterbase in all aspects. i need ur advice.
avanti has wider range of products but in shrimp feeds OM are better for waterbase
Sir, pls express ur valued opinion on Somi Conveyor Beltings…
better bet available in the market
Could you please name a few.. Foods and Inns also appear decent.. What is your take?
food and inns as previously told in the blog is researched and dumped idea. when there’s freshtrop available why would anyone ever go to food and inns…i dont like it at all
hi whats ur view on panchsheel organics
not convincing at the moment
Hi ace entered Prima and Cybertech today….let’s hope for the best…
sir your expert views on ucal fuel after the current results
results are one thing, but we have to be sure that its good for investment before investing…so far nothing
Ace, Ur vies on Narmada Gelatines Ltd. please.
decent but not exciting
Hi Ace ,
Your views on La Opala RG .
dont have guts to buy at these valuations
Dear Ace, Good Morning .
Sir do you track Vinyl Chemicals ? Any way what is your view..
Regards
skdc
as repeated multiple times on the blog dont like it
sir ji, you forgot about the biggest (actually smallest) feather in your cap .. Orient Beverages ! its turned out to be a 5 bagger from a mcap of just around 4 cr
completely skipped this gem !
you should come out with an update about orient !
🙂
Hi Ace Ji,
I heard SEBI new delisting norms are out, Can you please postmortem it and let us know about the key highlights for investor.
Hi Ace,
Appreciate your view on the delisting norm if you have got chance to go through it.
Hi Ace,
Please share ur views on Shetron Ltd. enjoys a good market share in asia.Posted a fantastic result.
not confident as of now
Now its turn for Aro Granite – holding high when others are under pressures – eager to see it hitting century by this week 🙂
yes, good stocks dont stay low for long 🙂
Hi Ace, whats your view on RPG LIFE SCIENCE LTD….promoters are buying heavily from open market.
not confident as of now
Dear ace pls. guide me about pharma co. Sanofi ?can i buy it for longterm.Is it a goodvalue at current price
not interested in it…better large caps available like auro or sun
hi Ace.. Today finally cupid and v2 retail are trading? Are the current price good for long term investment
yes…but hopefully you are buying business and not price
Actually both.. so i get the right business at the right price.. Was concerned about managment as these are micro cap companies
then its dicey because my right price may not be right according to you. Please invest if you are confident that you are buying undervalued growth companies
Ace, I added more v2 today 🙂
Ace, as u mentioned earlier about Aimco that one can take decision post results and as we know results were good, so it good time to accumulate more Aimco around 81 bucks?
you can take a decision after some consolidation
Thanks bro, got your point.
Hi Ace….seek ur views on premier explosives….dolphin offshore…..Jayshree Tea….Neocorp International…
Amazing analysis and insights….. Got to learn a lot from ur blogs….
Keep up the good work….God bless u… 🙂
only premier looks interesting on declines
Hi Ace, your views on nile at cmp?
not confident as of now
Hi Ace, Can you please show some light on Pioneer Embroideries & RPG life science?
dont like either one
Thanks Sir 🙂 Waiting for your new post.
would appreciate if the blog readers address me with my alias rather than sir….sir is very formal 🙂 … pls
Hi Ace,today entered Waterbase @ 58/- is it OK?
hopefully …if you yourself are convinced
Yes I am convinced Ace,thanks.
Hi Ace – Your view on Rossell India ?
Thanks and Keep up the good work
not too enthused by rossell
Sir, request you to share your views on Talbros Automotive Components. Thank You
dont like it
Sir,
I would be glad if you could kindly elaborate a little. I believe the fundamentals of the company are good (though it has some debt on its book), the company has been consistently performing well & the auto ancillary sector is likely to do very well going ahead.
I look up to your advise as there could be something that I may be missing.
Thank You
Regards,
Parin Narichania
sorry lost your context, which company are you talking about?
ACE, I just spoke to Prima Finance person Mr. Jayanth bhatt for my queries..why only standalone results shown not consolidated, he said as per SEBI it is not mandatory to show the subsidiary company result which they have not done sofar…their subsidiary of JV Cameroon company Prima Dee-lite Plastics Pvt. Ltd financial year ending is December 2014… So he informed Consolidated result would be shown in March 2015.. when I was asking how the profitability of the JV Company as the major shares in the annual report are driven from JV company only… He said figures would be informed during March 2015, He was glad to say that major crude oil fall down is making huge impact on profitability.. He was firm to say profitability would never disappoint for any reasons as inventories are geared up.. . regarding company order book he was not able to say that he said he would check with marketing department he would reply if I call him tomorrow… I am too satisfied as during the discussion he was so patient on my all queries and he was very optimistic on company performance…. So It is my thought that as the crude oil fall had already shown the significance in Indian operation recent quarter result…hope it will reflect in JV Cameroon company Prima Dee-lite Plastics Pvt. Ltd coming financial year result aswell… with these all I guess it would easily cross last year consolidated EPS 6.9 to more than 9..So I concluded myself I am riding on growth company…..Thanks for the recommendation ACE.
🙂
thanks for sharing mr. prabhu…
Thanks for good work Ace. Can you please advise on Balkrishna Industries? It Fell from 838 to 631 in just 7 days but it seems the fundamentals are good… you view please?
dont like it much…
Hi Ace,
Whats your view on SPEL Semiconductor Ltd? Is there any future in its business ?
dont like it
Hello ace , can you plz share your views on Hindustan Media Ventures for a long term investment .
dont like it
Bravo! You booked your profits with cupid!
so have you finally made up your mind or not….whether i bought those lakhs of shares before publishing the interview or done profit booking.. ha ha ha..people like you make my day or else i would loose my sense of humour… May god give you peace of mind …God Bless.
don’t bother replying to A’holes like these ACE
probably you are right 🙂
hahahahaaha… kalyug aa gaya hain ace… this guys ass starts itching thinking about your portfolio value probably
eeeewwww! yuks!
chirag bhai, sorry for this, but dont degrade urself with such lame comments. Ace is mature enough to handle such questions.
hi ace,
pls share ur view on redington and himatsingka seide at current cmp
dont like both sir..
dear zoom
please zoom from this blog and don’t again come to zoom in this blog….our mind get zoom with ur idiotic zooming comments…if u r not happy with this blog then why r u coming here and giving Bakwaas comments…
Dear Ace,
Thanks for your meticulous research.
Its really heartening to see a person selflessly putting a lot of time as well as effort to make other people rich.
Hats off to you & best of luck.
I’d like to know your opinion about Neo Corp International, a packaging company which has posted quite decent results recently. Also the business is interesting.
not very confident as of now
Thank you for your prompt response.
Sir, do you track ‘Confidence Petro’ and if can be bought at the current levels?
dont like it
Hi ACE,
pls share ur view on Rolta India and Bambino Agro at CMP.
Thanks
rather than rolta would prefer cybertech and bambino not sure at the moment
Sir, Kindly request you to provide your insight on Ashok Alco-Chem Ltd – a company that is likely to have an EPS of Rs. 25-30 in FY15 & is currently valued at just about 2 PE.
Thank You
dont like the company as its too commoditised…
Thank You Sir for your prompt reply
have a look at this Ace http://www.thehindubusinessline.com/markets/stock-markets/skm-egg-zooms-20-times-in-9-months/article6611918.ece
saw that…one of the papers that i get is businessline .. though it seemed more like an advertisement
Hi Ace, I am new to investing and am doing some research on a few companies. My eyes are on :ON mobile global” . would like to know your opinion on this company ?
dont like the company
http://jobsearch.naukri.com/job-listings-E-Commerce-Manager-head-V2-Retail-Delhi-NCR-National-Capital-Region-Gurgaon-2-to-7-years-071014002830
Ace, i got the above link from moneycontrol message board. Seems like sign of good times ahead for V2R
possible
Written at the bottom of that link “V2 Retail Ltd ., considering its huge expansion plans, is looking for smart, energetic, target-oriented and cheerful people with positive bent of mind.”
Business manager to activate and coordinate day to day business operations with leading online marketplaces like Amazon, eBay, Snapdeal etc. 🙂 🙂 seems like v2 going to sell on amazon and snapdeal! its already there on ebay
Ace, am getting all excited again! 🙂
i can see that…but dont get overexcited…i hope you dont have all eggs in one basket
i have suzlon, jp associates and purchased v2 after ur recommendation
Sir, I had asked your views on “Talbros Automotive Components”. You commented that you didn’t like it.
I would be glad if you could kindly elaborate a little. I believe the fundamentals of the company are good (though it has some debt on its book), the company has been consistently performing well & the auto ancillary sector is likely to do very well going ahead.
I look up to your advise as there could be something that I may be missing.
Thank You
i think there are much better bets available in the market
Hi Ace,
What’s your take on Waterbase. It has fallen from 90 to 57 level.
Thanks
it has also risen from 18 to 57 ….you forgot to mention that
Hi Sir,
I am sorry if the comment was offending. What I wanted to check was , Is this the right time to enter again into waterbase . since it is available at a cheaper price as compare to 1-1.5 month ago or you think that there is still some possibility of correction in this stock.
Thanks,
Saurabh
i feel the downside is capped because of divident yield. also the results were very promising and the industry so far is doing good
Dear sir,whats your opinion on Madhav mables?
dont like it at all..not shareholder friendly…in last 10 yrs sales have gone nowhere and profits have halved..why would anyone want to buy it
Hi! Ace,
Can you tell us what is the order value given by Safeware to Cupid and for how many years?Thnx.
its not fixed order. every year they would arrive at it and this year there would be hardly any order flow in the books.
Hello ACE
Had a look at the FY’14 annual report. It says they received an order for female condoms which started to reflect in March’14 quarter and also they say the remainder of the order runs through till October’14. Now as i see the panic in stock after October. Is their order book sound for the remainder of FY’15. Any details shared by Garg on orders being executed for the remainder of FY’15.
Also whats little frustrating is there are no buyers even for few hundreds of shares daily after 25% drop from peak levels of 60.
Thanks
Prabhu
mr. garg said they would easily do whatever they have done in H1 in H2 also, without considering some shipments for safeware…whatever small orders safeware gives this FY would be bonus on top of it….i have clearly written that in the update…have you read it? also, this is the reason traders are important in markets…they keep things exciting…although fundamentally, there nothing that appears wrong with company, but 2% circuit has kept traders at bay and therefore, people get nervous…i see only 15k pending orders…anyone can actually buy it but people are scared because of lack of activity. Business wise, so far nothing wrong..
Hello ACE
Neo corp with Compounded sales growth of 45% fr last 5yr..compounded profit growth of 25% over 3yrs..1200 cr sales company with a market cap of mere 160cr and operating profit margin of 10% is very much mouth watering..but a low promoter holding of 25% which has increased from 12% over the yr..also seems to be that some mess up hapd wth their GDR issue and stock crashed to 6 levels a year ago wen FII exited neo..didnt find reason for their exit..
Also recently Neo has acquired a bangalore based PP/HDPE manufacturer IPC Packaging co pvt ltd ..and added rooftop farming to their agrotech products
Whats your call on neo corp ACE..?
Thanks
Prabhu
already replied on neo…as of now not confident about neo
Hello Ace Ji…..Thanks a lot for all your efforts….you are doing really a GREAT , GREAT ,GREAT job…hats off to u……..although i am a very late entrant to Cupid and you blog (bought Cupid last week around 40 and read ur blog today but i heard ur name in Cupid Board in Moneycontrol) , i want to know that as the price is going downward , should i buy more to avg. the price…Thanks in advance!!!!!!——Regards- Hafiz
are you yourself convinced about the business. cupid is risky but could be very rewarding. if you are convinced then you can think of taking a plunge. remember the stock has appreciated quite a bit after being recommended here giving returns as high as 180%. also, if you bought at 40, averaging now does not make sense as its not even 10% decline.
Thanks Ace Ji for such a quick reply…Yes Ace Ji…i am very much convinced BUT my only concern is that i missed the opportunity to buy @price u recommended as i was not aware of ur such a wonderful blogs….so from now i dont want to miss any opportunity….pls give some clue on date before publishing ur next investment idea……regarding Cupid , someone raised qs in Moneycontrol that why MD is leaking such sensitive information(WHO order confirmation and all) one to one investor and why not publishing to the exchanges as per company rule so the promoter might be fraud…..however i do not agree to that but would want to know ur view on the same…Thanks in advance…GOD Bless U…..
tomorrow the answer to the Name this gem 2 is being published. although no company is required to announce on exchanges the order wins, but i personally would like cupid to announce it to exchanges and had requested him last time and this time too. Let’s hope better sense prevails.
Okay Ace ji…..will look forward to ur next investment idea tomorrow……GOD give u long long long life……